The runs a story this morning that – even after Lehman’s collapse, the economic melting, bail-outs, stimulus and assorted other happenings of the last 3 years – is shocking.

It reveals that, after taking leadership of MF Global, Jon Corzine, former CEO of Goldman-Sacks, former Senator, former Governor of New Jersey, lobbied intensely to keep the Commodity Futures Trading Commission, no stranger to back-slapping politics, from passing a new rule prohibiting firms from using client money to trade for itself.

The agency proposing the rule, the , relented. Wall Street, which has been working to curb many , won another battle.

The proposed rule would have restricted a complicated transaction that allowed MF Global in essence to borrow money from its own customers. Brokerage firms are allowed to use customers’ money to earn interest, not unlike banks, but this rule would have outlawed using customer funds for a loan to the firm itself.

MF Global financed these purchases through complex transactions known as repurchase agreements. In these, the bonds themselves were used as collateral for a loan to purchase them. The interest paid on that loan was less than the interest the bonds paid out, earning the firm a profit from the spread.

While that practice is quite common, the C.F.T.C. wanted to crack down on such lending in those instances when customer funds were used. The C.F.T.C. proposal would have also banned the use of client funds to buy foreign sovereign debt.

The article explains that MF Global not only hired lobbyists to block the enactment of the rule, but that Mr. Corzine himself personally lobbied the CFTC members themselves:

Mr. Corzine’s efforts culminated on July 20, as the agency was preparing for a vote on the proposal. That day, MF Global executives were on four different calls with the agency’s staff. Mr. Corzine himself was on two of those calls.

One of the calls was with Mr. Gensler. Both men are active Democrats, and served on financial panels together recently.

Shortly after the calls, Mr. Gensler, aware that he lacked the support to push the vote through, decided to delay the proposal indefinitely. He did so at the urging of Republican commissioners, according to people familiar with the matter.

But after MF Global’s blowup and the ensuing fallout from the missing funds, regulators said they were considering pushing again on the rule.

I think even The Times is under great pressure about what it writes concerning Corzine and MF Global. The article makes clear that neither he nor anyone in his firm has been charged with a crime or done anything illegal.

I’m not sure that is true. MF Global’s hyper lobbying campaign on the eve of a vote on the new rules may itself be a violation of federal transparency (sun-shine) rules. The CFTC had to have open public hearings on the rule before the vote. This was the forum for the industry to fight for its views. For a firm to then turn around and privately lobbying the commissioners immediately before the vote is highly irregular, maybe illegal. Although it is common practice for CEOs to meet with elected official and regulators to explain his or her company’s interest in the rule, Mr. Corzine was not (as far as I can tell) a registered lobbyist. He may have overstepped his bounds here as well.